Home Affordable Mortgage Modification Program (HAMP) is Expired.

If you’re struggling to make your monthly mortgage payment, Fannie Mae and Freddie Mac have a new loan modification program so your home stays out of foreclosure — and you stay put. This and other loan modifications are now available in Chapter 13.

The program, called Flex Modification, goes into effect formally on October 1, 2017; however, most servicers are voluntarily participating in the program since the end HAMP. It will incorporate key elements from Fannie’s and Freddie’s standard and streamlined modification programs, as well as their expired Home Affordable Modification Program.

What is the Flex Modification program?

Created under the direction of the Federal Housing Finance Agency, Flex Modification fills the need for a long-term foreclosure-prevention solution now that HAMP has expired. A loan modification is when a lender agrees to change the original terms of your mortgage — often by extending the loan term or reducing the principal balance or interest rate — to lower your monthly payments.

The program is called “Flex Modification” because it offers lenders greater flexibility in evaluating borrowers compared with previous loan modification programs. With HAMP, lenders could adjust the terms of a qualified loan until a mortgage payment equaled 31% of the borrower’s income. The Flex Modification program applies those same measures, but it allows lenders to also consider how many days delinquent borrowers are and the value of their home. It aims to reduce monthly mortgage payments by 20% for eligible borrowers.

Am I eligible?

Here are the criteria to be approved for a Flex Modification:

Your mortgage must be owned or guaranteed by Fannie or Freddie. Loans from the FHA, VA or USDA do not qualify.

Your mortgage must be at least one year old.

You must have a first-lien mortgage, which means your mortgage company will be repaid first if you default on your loan and the home is sold.

You must be 60 days or more past due on a loan for a primary residence, second home or investment property.

Your mortgage loan is current or less than 60 days past due, but your lender has determined your loan is in “imminent default.” That means the lender believes you are no longer able to afford your monthly payment.

Your property is allowed to be vacant or condemned, which is when a public authority uses the power of eminent domain to seize a property for public use.

Our office will help you apply in a Chapter 13 or Foreclosure Case

Will need a complete Borrower Response Package, which includes:

A signed and completed borrower assistance form.

A signed and completed Request for Individual Tax Return Transcript IRS form.

Documentable proof of a financial hardship, such as a job loss, divorce, death or illness.

Proof of income. Unemployment income doesn’t qualify. If you’re unemployed, Fannie and Freddie are likely to provide six months of unemployment forbearance instead of loan modification, according to the FHFA.

If you have any questions and/or would like additional information, please don’t hesitate to contact us by visiting our contact page or calling (614) 481-4480 today!